Klarna burst onto Wall Street with a dramatic 30% jump in its New York debut on Wednesday, its shares opening at $52 compared with an IPO price of $40. The surge gave the Swedish fintech a market capitalization of $19.65 billion, ending its years-long wait for a listing and marking the biggest debut by a Swedish company in the U.S. since Spotify in 2018.
The buy-now, pay-later lender, which helped reshape online shopping with its short-term financing model, sold 34.3 million shares at $40 each, above the marketed range of $35 to $37. That pricing valued the company at $15.1 billion, while selling shareholders—including Silicon Valley giant Sequoia Capital and Danish billionaire Anders Holch Povlsen’s Heartland A/S—raised $1.17 billion. Chief Executive Sebastian Siemiatkowski, who owns about 7% of Klarna, did not sell any shares.
“This (going public) is really an opportunity… primarily for new shareholders, our 111 million consumers and others to really partake in that journey to disrupt the financial services industry and be the next generation of personal finance,” Chief Financial Officer Niclas Neglén told Reuters.
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The timing could not have been more symbolic. Klarna’s debut leads a slate of seven companies—including the Winklevoss twins’ crypto exchange Gemini—poised to go public in New York by Friday. It marks the busiest week for listings in years, reviving a U.S. IPO market that had been largely dormant amid tariff-driven volatility earlier in 2024. Klarna and others were forced to shelve flotation plans in April after turbulence slammed equity markets, delaying what many had hoped would be the sector’s recovery.
At its pandemic-era peak in 2021, Klarna was valued at $45.6 billion before crashing to $6.7 billion a year later under pressure from rising inflation and interest rates. Analysts noted the IPO pricing strategy reflected a more conservative stance designed to fuel strong aftermarket demand.
“$15 billion is far from disappointing given it was above Klarna’s price range and shows a continuing trend of issuers being conservative in initial valuation expectations to garner investor demand and to hopefully leave them wanting more,” said Samuel Kerr, head of equity capital markets at Mergermarket.
A BNPL Growth Engine
If Wednesday’s momentum holds, Klarna’s IPO could become a turning point for BNPL and the broader fintech sector. Analysts believe that the company’s model—focused on smaller-ticket items with an average order value of $101—makes it resilient in a climate where sticky inflation, labor market cracks, and slowing income growth are shaping consumer habits.
U.S.-based rival Affirm, valued at $29 billion, has surged 45% this year by targeting larger purchases with longer zero-interest financing. If Klarna continues to differentiate through high-frequency, smaller purchases, it could steadily eat into debit card use, a trend analysts believe will accelerate over the next several years.
The broader market implications are also significant. A strong aftermarket for Klarna could embolden other fintechs and high-growth companies to revive listing plans, reversing a near three-year drought in U.S. IPO activity.
“A strong aftermarket could convince other fintechs to take the plunge into public markets,” said Russ Mould, investment director at AJ Bell.
A Cautionary Tale
The risk, however, is that Klarna’s debut may set expectations too high. “The danger is that one good deal begets a few more and then a torrent of less good ones follows behind,” Mould warned.
If weaker IPOs ride Klarna’s coattails only to disappoint, investor confidence could sour again, choking off the market’s fragile rebound.
Klarna itself faces headwinds. Once profitable for its first 14 years, the company has posted losses in recent years as it expanded in the U.S. and other global markets. Its ability to manage costs, return to profitability, and prove that BNPL is more than a short-term pandemic-era phenomenon will be under scrutiny.
“Klarna’s IPO will be a thermometer, showing how hot, or not, investors think BNPL will be,” said Brian Jacobsen, chief economist at Annex Wealth Management.
The company’s leadership appears aware of the balancing act ahead. “Right now, we’re more focusing on bringing additional value to our existing user base than the growth of the user base, because the growth has been very, very consistent,” Siemiatkowski said.
IPO Market Barometer
For now, Klarna’s debut is a win not just for the company but for Wall Street’s listing pipeline, signaling that investor appetite is returning despite tariff shocks and economic uncertainty. But analysts say that Klarna cementing its rebound may depend on how it navigates profitability pressures and whether the BNPL sector can deliver on promises of durable growth.
Some believe that Klarna’s IPO is both a milestone and a test case. It shows that fintechs can command investor enthusiasm, but it also raises the question of whether this enthusiasm is built on solid fundamentals or a fleeting appetite for growth stories in a still-uncertain economy.